Man in Demand

December 20th, 2017
Man in Demand

[Editor's Note: At 4:41 p.m. on January 9 and at 9:56 a.m. on January 13, 2019, this story was edited for style, content and accuracy.]

Some men break the law.

Others bend it.

In New Jersey's fastest-growing municipality, what is or is not legal is open to interpretation when you're a man in demand.

This past summer, Lakewood attorney Michael I. Inzelbuch became a man in demand.

In exchange for his legal services, members of the Lakewood Board of Education (BOE) voted to approve a generous contract according to terms dictated by the returning former board attorney.

Maybe too generous, according to a complaint filed by the Education Law Center (ELC) with the N.J. Attorney General's Office.

The ELC, like Inzelbuch, has a history of advocating on behalf of public school students with special needs.

According to its' Web site, Professor Paul Tractenberg of Rutgers Law School in Newark founded ELC in 1973 through a grant from the Ford Foundation. The organization's legal and policy advocacy resulted in the landmark ruling Abbott v. Burke, which reportedly advanced the provision of fair school funding, high quality early education, safe and adequate school facilities, and reform of inner city schools serving high concentrations of at-risk students and students with disabilities and other special needs.

In a letter dated October 5, 2017, Michelle L. Miller, Acting Director of the Division of Law, Department of Law and Public Safety, Office of the N.J. Attorney General, informed Lakewood BOE President Moshe Bender and district Superintendent of Schools Laura Winters that she had received a complaint from the ELC regarding the Inzelbuch contract the board approved on June 14, 2017.

"Our initial review of the documents (attached) suggests that this contract may not be consistent with Department of Education requirements," Miller told Bender and Winters.

A reporter for NJ News & Views made an Open Public Records Act (OPRA) request with the district for both Miller's letter to Bender and Winters, as well as the referenced attachment. The district records custodian responded with Miller's letter, which the Asbury Park Press had already posted online, but not the referenced attached complaint, which the newspaper had not posted.

The district records custodian advised this reporter to instead request the document from Miller.

According to Miller, Inzelbuch's contract called for payment of an annual retainer in the amount of $600,000, to be paid in 12 equal monthly installments.

The contract also called for an immediate payment of $29,000 for Inzelbuch and his family's health and prescription coverage.

In addition, Miller said, Inzelbuch will bill the district $350/hour for district litigation services, as well as reimbursement of filing fees, travel, parking and photocopying.

Lastly, Miller said, under his contract, Inzelbuch may serve as co-counsel, at $200/hour, in cases where the board's insurer assigns counsel or the board appoints special counsel.

"As you are aware, the Department of Education's accountability regulations require boards of education to establish by policy strategies to minimize the cost of professional services, including legal services," Miller told Bender and Winters.

She referred Bender and Winters to N.J.A.C. 6A:23A-5.2.

"In addition to establishing a maximum dollar limit for each type of professional service, and imposing other requirements to ensure the prudent use of legal services, the regulations prohibit "advance payments" for legal services," Miller said.

Miller referenced N.J.A.C. 6A;23A-5.2(a)(4).

"Instead, the regulations require that contracts for legal services describe in detail the services to be provided, and authorize payment only upon presentation of an invoice itemizing the services actually provided in the billing period," Miller said.

Based on state regulation, Miller instructed Bender and Winters to respond to the complaint by October 30, 2017, including a description of the procurement process used by the board in awarding Inzelbuch the contract at issue.

The letter was copied to district counsel David Sciarra and Edward J. Dauber of Greenberg Dauber Epstein and Tucker.

In his letter of response, dated November 15, 2017, requested under OPRA, Dauber defended the Inzelbuch contract.

"While the contract may not be typical of those utilized by attorneys representing school boards, given the fairly unique circumstances of the Lakewood Public School District, it not only is legally compliant with the regulations…it will in fact result in considerable financial savings to the District (and has already done so)," Dauber told Miller. "(It) will also provide better legal and related policy outcomes for the District."

Dauber not only asserted that contracting Inzelbuch's legal services would be a cost-savings benefit to taxpayers, he maintained that because state monitors assigned to oversee the Lakewood School District's finances approved of the deal, so did the state commissioner of education and the governor.

Dauber said that during the last year of Inzelbuch's employ as board attorney in 2012, he billed the district a total of $322,247.

Dauber did not include Inzelbuch's salary as part-time non-public special education consultant that same year, which exceeded $100,000 during the school year, or the cost of the Tier A benefits Inzelbuch demanded as a district employee for himself and his growing family.

As a part-time non-public special education consultant, Inzelbuch was not required to account for the amount of time he spent in the performance of his duties as a district administrator, according to an OPRA request made by NJ News & Views during Inzelbuch's decade of service from 2002-12. The only documents the district records custodian produced in response to the request were Inzelbuch's meticulously-itemized billings as board attorney.

Dauber said that upon dismissing Inzelbuch as board attorney in 2012, board members hired the firm of Schwartz Simon Edelstein & Celso to represent them during the 2012-2013 school year.

"Their fees totaled in excess of $1.3 million," Dauber said.

In 2013, numerous media outlets reported that state and Federal agencies were investigating and auditing the district based on charges of fraud allegedly committed during the 10 years Inzelbuch represented the Lakewood board.

That same year, this editor/reporter for NJ News & Views filed an OPRA complaint against the board and its' designated records custodian for failing to respond in accordance with state law to a request for transportation documents that included contracts, bills and invoices. The board's new counsel defended against the complaint by claiming that the records were among the documents subpoenaed by Federal investigators.

The Government Records Council (GRC) subsequently found in favor of the OPRA complaint, but allowed district administrators a second opportunity to correct the violation by producing the requested records.

Dauber told Miller that after dismissing Schwartz Simon Edelstein & Celso, the Lakewood BOE hired the law firm of Schenck Price Smith & King from 2013 until 2017, when the board hired Inzelbuch.

The board's legal bills during that time, while lower than the previous firm's total billings, continued to top more than half-a-million dollars annually.

Dauber reported the following annual total billings paid to the Lakewood board attorney:

• 2013-2014 - $681,190.50;
• 2014-2015 - $538,753.30;
• 2015-2016 - $619,392.00; and
• 2016-2017 - $713,113.75.

In contrast, according to Dauber, the board paid a total of $714,055 in legal fees to Inzelbuch during the 2016-2017 school year after he successfully sued the district repeatedly on behalf of his clients.

Dauber explained to Miller how the board handled the procurement process for legal services.

He said the board initially issued Request For Proposal (RFP) 03-1718 for the position of school board attorney/legal services from June 1, 2017-June 30, 2018, with a submission date of April 4, 2017. The RFP provided for two contracts: a retainer agreement and a contract for litigation services.

"The Qualification of Respondents included a provision that the School Board Attorney's firm have at least five New Jersey licensed attorneys," Dauber told Miller.

Inzelbuch is a sole practitioner.

According to Dauber's explanation, the RFP was written to reflect the demands that Inzelbuch publicly made in communications with the board, which he demanded be posted on the district Web site where a reporter for NJ News & Views read them.

On June 14, the board voted to cancel RFP 03-1718 and to replace it with RFP 05-1718. The new RFP omitted the condition that the board attorney have at least five attorneys licensed to practice in New Jersey.

Dauber said eight law firms bid on the two contracts, except for one that did not bid on the retainer agreement.

He did not identify the law firm that did not bid on the retainer agreement.

The bids ranged from a low of $295,000 to a high bid by Inzelbuch of $600,000.

Dauber did not identify the law firm that submitted the lowest bid, or whether that firm was the only one not to bid on the retainer agreement.

"The bids were scored and weighed in accordance with the RFP's evaluation criteria," Dauber told Miller. "Mr. Inzelbuch's submission included numerous letters of recommendation and selected judicial opinions of cases in which he had prevailed previously on behalf of the Lakewood Board of Education."

Dauber indicated that the board delayed in closing the deal with Inzelbuch based on a lack of available funding.

"On August 16, 2017, only after the Board secured funding to meet its' "thorough and efficient " requirement, Mr. Inzelbuch accepted the appointment, which the Board unanimously approved."

Several months earlier, Inzelbuch told board members during a public forum that he would not agree to work for them until the district provided a "thorough and efficient education" to all students.

In order to meet Inzelbuch's demand that the district not cut any educational, athletic or program services to close a double-digit, multi-million-dollar deficit, the Lakewood Township Committee gifted the board with more than $1 million designated for public and non-public school services.

Earlier this year, a reporter asked members of the township committee if they would restore funding to the municipal line item for public school trash removal to further assist the cash-strapped district.

Mayor Raymond Coles said no.

While the township no longer funds public school trash removal, committeemen continue to fund trash pickup for all non-public schools at no charge to them, but at a reported cost last year of more than one million dollars to Lakewood taxpayers.

"The ELC suggests that because the retainer is payable in equal installments on the first day of each month, the Contract violates…regulation," Dauber said. "However, the ELC misreads the Contract and, in fact, the Board's payment practice has been totally consistent with its RFP and…regulation."

Dauber drew Miller's attention to paragraph 2a on page 2 on Inzelbuch's contract, which he said called for payment of services rendered from August 17-31 to be paid on September 1, and on the first of every month thereafter.

"Thus, there is no issue of "advance payments," Dauber maintained.

Not exactly.

According to invoices for payment of legal services to Inzelbuch, which NJ News & Views requested under OPRA, each of the district's monthly Remittance Advice invoices for payment of Inzelbuch's legal services, not including litigation, reported the same date of July 31, 2017, in the same amount of $50,000, for each of the monthly billing periods, including the initial payment of $29,148.24 that Inzelbuch demanded to cover his and his family's health and prescription costs.

According to Inzelbuch's separate billing for the same amount, which NJ News & Views also received under OPRA, the $29,148.24 health benefits expense was incurred between August 17-31, 2017, even though he reportedly did not begin working for the district until September 1, 2017.

That is payment in advance.

Inzelbuch invoiced the district for his monthly retainer payment of $50,000 on October 31 for services rendered from October 1 to the end of the month. While he acknowledged he was out of the country the first half of the month, until October 16. Inzelbuch defended the full $50,000 retainer charge by asserting he had counseled the board numerous times by e-mail and phone during his absence.

There is no way he can prove that assertion because the invoice he submitted for payment of services was not itemized.

When you're a man in demand, you don't need to justify how you charge for legal services, whether you work for the local school board or the local municipal government.

That is because Lakewood Township Attorney Steven Secare is also a man in demand.

From 1999-2008, the Democratic majority on the Lakewood Township Committee contracted the legal services of Secare's former law firm as township attorney.

During those years, Secare billed for services rendered by itemizing his bills and charging them on an hourly rate under the terms of his two contracts.

After Republicans became the majority party on the township committee in 2009, Secare continued to work for the township as labor attorney, but not as township attorney.

That was then.

In 2014, Secare returned to his former position, even though Democrats were still the minority party on the local governing body.

Like returning board attorney Michael Inzelbuch, Secare returned to his former position with new contract demands.

While Dauber denied that Inzelbuch's contract calls for payment of his retainer in advance of performing legal services, Secare's annual contracts since 2014 require quarterly payments in advance.

Unlike Inzelbuch's current contract, Secare's contract did not state that his quarterly payments were an advance on a yearly retainer agreement.

Earlier this year, a reporter for NJ News & Views publicly asked 2017 Lakewood Mayor Raymond Coles, a Democrat, if the township paid any of its' legal counsel a retainer fee.

Coles said no.

This year, Secare's contract not only includes payment of services rendered as township attorney on a lump-sum quarterly basis, it also includes services rendered in advance as labor attorney, which he no longer itemizes in full either.

Although the Lakewood Township Committee approved a resolution for the hire of Secare & Hensel as township attorney, no one on the local governing body signed the actual 2017 contract, which NJ News & Views requested earlier this month under OPRA.

Instead, Secare signed his name for Coles, as well as himself in the signature lines above each man's pre-printed name.

On December 19, 2017, a reporter for NJ News & Views e-mailed Secare and Coles separately for comment.

The reporter asked Secare if he believed his 2017 contract with Lakewood was legal if he signed it in place of his client.

Secare did not respond for comment.

In a December 19, 2017 e-mail, the reporter asked Coles why he did not sign the township's 2017 contract with Secare & Hensel.

The reporter also asked Coles if he was aware that Secare had signed his name on the signature line over Coles' pre-printed name as mayor, as well as his own.

The reporter asked Coles if he was aware that the contract was altered by the hand-written addition to the contract of Secare's services as the township's labor attorney.

The reporter wanted to know how local government could calculate how much time Secare & Hensel was spending as township attorney and how much time the firm was spending as labor attorney if it billed for services as a lump sum payment for both positions, instead of itemizing bills and accounting for all time served on behalf of Lakewood taxpayers.

The reporter asked Coles if he believed his constituents and Lakewood taxpayers were well-served by the contract with Secare & Hensel. If so, why?

Next year, Secare may be serving a larger clientele of taxpayers.

According to documents NJ News & Views recently received from state Superior Civil Court records in Toms River, Harold Hensel of Secare & Hensel reported that his firm was withdrawing as defense counsel for Lakewood Township, 2016 Lakewood Mayor Menashe Miller and Lakewood Municipal Manager Thomas L. Henshaw, who are being sued by California real estate investor Kenneth Garzo.

The reporter asked Coles if Secare had withdrawn because he had accepted the position of Ocean County prosecutor under the incoming administration of Governor-elect Phil Murphy.

According to sources, the Murphy transition team has offered Secare the position of Ocean County prosecutor.

NJ News & Views attempted to contact the Murphy transition team for comment through the e-mail address on candidate Murphy's Web site. A reporter received a delivery failure message from the mail server.

The reporter contacted the state Democratic Committee to request a valid e-mail address or telephone contact number for the Murphy transition team. A spokesman informed the reporter that the Democratic Committee did not have Murphy's current e-mail address or a contact number.

The reporter also asked Coles if the firm of Rubin Ehrlich & Buckley, P.C., which reportedly appointed Robert L. Grundlock, Jr. to supersede Hensel of Secare & Hensel as defense counsel in the Garzo lawsuit, would be appointed as next year's township attorney.

Coles did not respond for comment.

Although neither Secare nor Coles would respond for comment to the reporter's questions, the state Comptroller has already weighed in on what a local municipal or school governing body may or may not do in contracting for legal services.

In a June 25, 2013 report, N.J. Comptroller A. Matthew Boxer analyzed the legal procurement process used by four local government units (LGU) at the following Internet address:

http://www.nj.gov/comptroller/news/docs/report_local_government_legal_fees.pdf

He also provided guidance to other LGUs seeking to procure legal services.

Boxer stressed the need for competitive bidding, transparency and accountability in the award of legal contracts in order to promote public confidence in the contracting process and to ensure that government entities are obtaining cost-effective services.

"New Jersey courts require that LGUs clearly define the fee arrangements in the contract to ensure that there is no overlap between services included as fixed compensation and those billed at an hourly rate," Boxer wrote.

Boxer expressed confidence that local government units that followed the report's "Best Practices for Engaging and Managing Legal Counsel" recommendations would benefit from the advice.

"With proper management of legal services contracts, LGUs can avoid excessive, unauthorized or fraudulent charges and can improve the quality of the legal services they receive," Boxer said.

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